Development 6% expect by 2022 Institute for Economic and Industrial Studies (IOBE)contrary to my prediction governmentin the latest draft budget 2023, by 5.3%. In contrast, IOBE is more pessimistic for 2023, with a GDP growth forecast of 1.6% compared to the government’s 2.1%, while also “seeing” a downside scenario of zero GDP growth if any of its assumptions will be refuted.

In particular, the 1.6% growth scenario is based on the assumption of a 10.5% increase in investment (compared to the 16% set by the government). “If investment does not “run” at such a pace,” said IOBE CEO Nikos Vettas yesterday, presenting the institution’s quarterly report, “perhaps GDP growth will be zero.” The same is true in the case of a new outbreak of a pandemic, the resumption of the war in Ukraine, the rejection of the central scenario for the development of the eurozone, delays in the Recovery Fund. In short, there are many ambiguities. At the same time, in addition to the growth rate of investments, Mr. Vettas noted that in the long term, the type of investment also matters. “The issue of innovation and attracting productive investment and human capital is becoming key,” he commented.

IOBE also projects inflation at 9.7% this year and 4.2% in 2023, compared to the government’s much more optimistic forecast of 8.8% and 3%, respectively.

An increase of 1.6% if investments increase by 10.5%, and zero if they do not “work” at that rate.

Mr. Vettas said that this year the Greek economy has shown positive dynamics, stronger than originally expected. In addition, this is accompanied by an improvement in indicators such as extraversion.

However, he added, on the contrary, the development of inflation, which is at a level above the average for the Eurozone, causes concern. There is also concern about the systematic increase in imports and, more generally, the change in the current account balance. While inflation is largely an exogenous problem, Mr. Wettas argued that it could be contained through policies to increase supply and competition.

“The Greek economy remains vulnerable in the medium term,” commented Mr. Vettas. “Government debt remains high, financing costs are rising, the external balance is worsening, dependence on imports is high, domestic savings remain low, pressure on the fiscal balance is expected to increase.”